Comprehension
In Kapilaben v. Ashok Kumar Jayantilal Sheth, (2020) 20 SCC 648, the Supreme Court has considered that the assignment of a contract might result in a transfer of either rights or obligations thereunder. The transfer of obligations is not possible without the consent of the other party. However, the transfer of rights is permissible, except in cases where the contract is of a personal nature. “It is well-settled that the term ‘representative-in-interest’ includes the assignee of a contractual interest. Though the provisions of the Contract Act do not particularly deal with the assignability of contracts, the court has opined time and again that a party to a contract cannot assign their obligations or liabilities without the consent of the other party. A Constitution Bench in Khardah Co. Ltd. v. Raymon & Co. (India) (P) Ltd. [AIR 1962 SC 1810], has laid out this principle as follows: “An assignment of a contract might result by transfer either of the rights or of the obligations thereunder. However, there is a well-recognised distinction between these two classes of assignments. As a rule, obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand, rights under a contract are assignable unless the contract is personal in its nature or the rights are incapable of assignment either under the law or under an agreement between the parties.”
[Extracted with edits from Indira Devi v. Veena Gupta, (2023) 8 SCC 124]
[Extracted with edits from Indira Devi v. Veena Gupta, (2023) 8 SCC 124]
Question: 1
‘A’, the absolute owner, with the consent of his family members, executed a conditional sale deed in favour of his tenant. The conditional sale deed contained a clause empowering the vendors to repurchase the property within seven years on repayment of the sale consideration. Which of the following statements regarding the agreement is true?
‘A’, the absolute owner, with the consent of his family members, executed a conditional sale deed in favour of his tenant. The conditional sale deed contained a clause empowering the vendors to repurchase the property within seven years on repayment of the sale consideration. Which of the following statements regarding the agreement is true?
Updated On: Dec 3, 2024
- The agreement is invalid
- The agreement is not valid because a conditional sale deed containing a clause for repurchase cannot be executed
- The agreement is not valid because the time period provided for repurchase by the vendor is very long, i.e., seven years
- The agreement is valid
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The Correct Option is D
Solution and Explanation
A conditional sale deed that includes a clause for repurchase within a reasonable period, even if it extends to seven years, is valid under the Indian Contract Act, as long as it is agreed upon by both parties and does not contravene any statutory provisions.
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Question: 2
Which of the following is correct regarding the assignability of the contract?
Which of the following is correct regarding the assignability of the contract?
Updated On: Dec 3, 2024
- The assignment of contracts is expressly governed by the provisions outlined in Sections 130 to 137 of the Indian Contract Act, 1872
- A party to a contract can transfer his liabilities under the contract without the consent of the other party
- A party to a contract cannot transfer his liabilities under the contract without the consent of the other party
- Transfer of obligation can be made to anyone without permission of anyone
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The Correct Option is A
Solution and Explanation
Statement (A) is correct: The provisions governing the assignment of contracts are outlined in Sections 130 to 137 of the Indian Contract Act, 1872. These sections deal with the assignment of rights and liabilities under contracts.
Statement (B) is incorrect: A party cannot transfer his liabilities without the consent of the other party, unless explicitly allowed by the contract.
Statement (C) is incorrect: This is a misleading statement as the transfer of liabilities without consent is generally prohibited under the Indian Contract Act, but the contract may provide for exceptions.
Statement (D) is incorrect: Transfer of obligations typically requires the consent of the other party.
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Question: 3
Who among the following is not ‘representative-in-interest’ for the purpose of obtaining specific performance?
Who among the following is not ‘representative-in-interest’ for the purpose of obtaining specific performance?
Updated On: Dec 3, 2024
- The person to whom the interest in the contract is transferred for a valuable consideration
- The person to whom the interest in the contract devolves by succession
- The person to whom the interest in contract is gifted by a gift deed
- Rank trespasser, as an intermeddler
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The Correct Option is D
Solution and Explanation
A ”rank trespasser” or intermeddler has no legal standing to enforce specific performance of a contract, as they have no legitimate interest or title in the contract.
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Question: 4
Consider the following statements:
I. The benefit of a contract is assignable in ‘cases where it can make no difference to the person on whom the obligation lies to which of two persons, he is to discharge it’
II. A contract which is such that the promisor must perform it in person, viz. involving personal considerations or personal skill or qualifications (such as his credit), are by their nature not assignable
III. The contractual rights for the payment of money or to building work do not involve personal considerations and are not contracts of a personal nature
Choose the correct answer:
Consider the following statements:
I. The benefit of a contract is assignable in ‘cases where it can make no difference to the person on whom the obligation lies to which of two persons, he is to discharge it’
II. A contract which is such that the promisor must perform it in person, viz. involving personal considerations or personal skill or qualifications (such as his credit), are by their nature not assignable
III. The contractual rights for the payment of money or to building work do not involve personal considerations and are not contracts of a personal nature
Choose the correct answer:
I. The benefit of a contract is assignable in ‘cases where it can make no difference to the person on whom the obligation lies to which of two persons, he is to discharge it’
II. A contract which is such that the promisor must perform it in person, viz. involving personal considerations or personal skill or qualifications (such as his credit), are by their nature not assignable
III. The contractual rights for the payment of money or to building work do not involve personal considerations and are not contracts of a personal nature
Choose the correct answer:
Updated On: Sep 10, 2025
- I and II are correct
- II and III are correct
- Only III is correct
- I, II and III are correct
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The Correct Option is C
Solution and Explanation
To solve the problem, we need to assess the correctness of the given statements regarding the assignability of contracts based on the comprehension provided.
- Statement I: "The benefit of a contract is assignable in cases where it can make no difference to the person on whom the obligation lies to which of two persons, he is to discharge it." This statement is generally correct as it aligns with the principle that rights under a contract can be assigned when they do not affect the obligor.
- Statement II: "A contract which is such that the promisor must perform it in person, viz. involving personal considerations or personal skill or qualifications are by their nature not assignable." This statement is valid and aligns with the law, which states that contracts involving personal skill or trust are not assignable.
- Statement III: "The contractual rights for the payment of money or to building work do not involve personal considerations and are not contracts of a personal nature." This is true as these types of contracts usually do not require personal performance and therefore are generally assignable.
Analyzing the statements in conjunction with the given comprehension, which discusses the assignability of contracts, particularly emphasizing that rights are assignable unless the contract is of a personal nature, we conclude:
The correct answer is Only Statement III is correct.
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Question: 5
Consider the following statements:
I. Where a party to the contract has obtained substituted performance of the contract as per law, such contract is not specifically enforceable
II. A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise, is not specifically enforceable
III. After the Amendment Act of 2018, a contract for non-performance for which compensation is an adequate relief is not specifically enforceable Choose the correct answer:
Consider the following statements:
I. Where a party to the contract has obtained substituted performance of the contract as per law, such contract is not specifically enforceable
II. A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise, is not specifically enforceable
III. After the Amendment Act of 2018, a contract for non-performance for which compensation is an adequate relief is not specifically enforceable Choose the correct answer:
I. Where a party to the contract has obtained substituted performance of the contract as per law, such contract is not specifically enforceable
II. A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise, is not specifically enforceable
III. After the Amendment Act of 2018, a contract for non-performance for which compensation is an adequate relief is not specifically enforceable Choose the correct answer:
Updated On: Sep 10, 2025
- All are correct
- I and II are correct
- II and III are correct
- Only II is correct
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The Correct Option is C
Solution and Explanation
The question presents three statements related to the specific enforceability of contracts, which we'll evaluate based on legal principles.
I. Statement: A contract with substituted performance obtained as per law is not specifically enforceable.
Analysis: After the Amendment Act of 2018, substituted performance, as per Section 20 of the Specific Relief Act, allows a party to have a third person perform the contract. This implies that if a substituted performance is sought and obtained, the original obligation isn't specifically enforceable.
Conclusion: This statement is incorrect.
II. Statement: Contracts involving continuous duties which the court cannot supervise aren't specifically enforceable.
Analysis: Section 14(c) of the Specific Relief Act states that any contract requiring continuous performance and is not supervised by the court is not specifically enforceable. Therefore, this statement aligns with the established legal doctrine and is correct.
Conclusion: This statement is correct.
III. Statement: Post-2018, a contract for non-performance, with adequate compensation, isn't specifically enforceable.
Analysis: Section 14(b) of the Specific Relief Act provides that when compensation is adequate, specific performance is not granted. The 2018 amendment emphasized this, making this statement consistent with the law.
Conclusion: This statement is correct.
Considering the above, options II and III are correct.
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- The Hon’ble Supreme Court in the case of ‘Nil Ratan Kundu and another v. Abhijit Kundu’ 2008(3) Apex Court Judgements 232 (SC), while granting the custody to the maternal grandparents observed: In our judgement, the law relating to custody of a child is fairly well settled and it is this. In deciding a difficult and complex question as to custody of minor, a Court of law should keep in mind relevant statutes and the rights flowing therefrom. But such cases cannot be decided solely by interpreting legal provisions. It is a humane problem in live in relationship and is required to be solved with human touch. A Court while dealing with custody cases, is neither bound by statutes nor by strict rules of evidence or procedure nor by precedents. In selecting proper guardian of a minor, the paramount consideration should be the welfare and well-being of the child. In selecting a guardian, the Court is exercising parens patriae jurisdiction and is expected, may bound, to give due weight to a child’s ordinary comfort, contentment, health, education, intellectual development and favorable surroundings. But over and above physical comforts, moral and ethical values cannot be ignored. They are equally, or we may say, even more important, essential and indispensable consideration. If the minor is old enough to form an intelligent preference or judgement, the Court must consider such preference as well, though the final decision should rest with the Court as to what is conducive to the welfare of the minor.
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When the court is confronted with conflicting demands made by the parents, each time it has to justify the demands. The Court has not only to look at the issue on legalistic basis, in such matters human angles are relevant for deciding those issues. The Court then does not give emphasis on what the parties say, it has to exercise a jurisdiction which is aimed at the welfare of the minor. As observed recently in Mausami Moitra Ganguli case, the Court has to give due weightage to the child’s ordinary contentment, health, education, intellectual development and favorable surroundings, but over and above physical comforts, the moral and ethical values have also to be noted. They are equal if not more important than the others.
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The impugned constitutional amendments by which Article 16 (4-A) and 16 (4-B) have been inserted, flow from Article 16 (4). They do not alter the structure of Article 16 (4). They retain the controlling factors or the compelling reasons which enables the State to provide for reservation keeping in mind the overall efficiency of the state administration under article 335. Sub-categorization within a class is a constitutional requirement to secure substantive equality in the event that there is a distinction between two sections of a class; Sub-classification must not lead to the exclusion of one of the categories in the class. A model that provides sufficient opportunities to all categories of the class must be adopted; and Sub-classification among a class must be on a reasonable basis.
Justice Bela Trivedi opined, in dissent, that presidential list of scheduled castes notified under Article 341 cannot be altered by the States. Any change to this list can only be made by a law enacted by Parliament. Sub-classification, according to her would amount to tampering with the Presidential List and undermine the object Article 341, which aims to eliminate political influence in the SC-ST List. Further, she emphasised the importance of adhering to the rule of plain and literal interpretation. She mentions that any preferential treatment for a sub-class within the presidential list would deprive other classes within the same category of their benefits. In the absence of executive or legislative power, state lack the competence to sub-classify castes and the benefit reserved for all SCs. Allowing states to do so would constitute a colourable exercise of power, which is impermissible under law. Justice Trivedi concluded by affirming that affirmative action by States must remain within constitutional boundaries and held that the law laid down in E.V. Chinnaiah case was correct and should be upheld.
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